Should I Buy C Limited (SE)? Finance YouTuber Analysis

The YouTuber believes Sea Limited is a "screaming buy" despite operating in a challenging macro environment and facing competition from TikTok Shop. Similar to Mercado Libre, its investments in logistics are re-accelerating gross merchandise volume, and a conservative reverse DCF analysis indicates the stock is undervalued, requiring only 5% annual growth over the next decade to justify its current price.

“Even with an extremely conservative 1% terminal growth rate, we're talking about a company that only needs to grow 5% per year over the next 10 years and get those 15% free cash flow margins in order to justify today's price.”

The YouTuber is bullish on Sea Limited, citing strong revenue growth (47% YoY) driven by e-commerce and fintech, and an expanding moat in logistics to counter TikTok Shop. He believes the stock is undervalued based on forward P/E and a reverse discounted cash flow analysis, which suggests very low future growth is priced in despite current high growth rates.

“This is a very very cheap stock.”

The YouTuber suggests buying C Limited, believing it is undervalued despite competition from TikTok Shop and concerns about its loan portfolio. He highlights strong gross merchandise volume growth and a healthy non-performing loan ratio. A reverse discounted cash flow analysis indicates the company only needs 5-6% revenue growth to justify its current stock price, significantly lower than its historical and analyst-projected growth rates.

“Between five and 6% revenue growth is what the company needs going forward to justify today's stock price as well as hitting those targets, excuse me, when it comes to uh their their operating margins.”

The YouTuber added to C Limited in January due to its very cheap valuation and impressive GMV growth. He acknowledges headwinds from oil prices and TikTok Shop competition but plans to add more when conditions are right.

“I added in January uh because I believe its valuation is very cheap. GMV growth has been uh very impressive. The company's really being held down right now by two things. One, are oil prices affecting Southeast Asia, and two is competition from Tik Tok shop.”

The YouTuber views Sea Limited as deeply undervalued. A conservative reverse discounted cash flow analysis indicates only 3% annual revenue growth is required, far below current analyst expectations (26%, 22%, 17%). He highlights the company's consistent outperformance of estimates and its 'anti-fragile' business model. Despite concerns about TikTok Shop competition, lending, and geopolitical risks, he plans to add to his existing large position when market momentum aligns with the strong valuation and business fundamentals.

“I love this valuation. I love the anti-fragility of the business and I would just like all three things to be going in my favor with the momentum of the stock before I add.”

The YouTuber believes Sea Limited (SE) is a buy despite recent price drops, citing its strong revenue growth across its e-commerce (Shopee), gaming (Garena), and fintech (Money) segments. He argues the stock is undervalued, trading at a significant discount to its historical forward P/E and P/FCF ratios, and a reverse DCF analysis suggests it only needs 6% annual revenue growth to justify its current price, which is well below its historical and projected growth rates. The investment thesis hinges on the company successfully expanding its logistics network and maintaining low non-performing loan rates.

“To me, this 6% bogey that they need to get over is incredibly low, making this stock look incredibly cheap. The big question is whether or not those 12% free cash flow margins are attainable. If they are, if building out the fulfillment network right now and making safe loans ends up happening, this will be a phenomenal entry point for this stock.”

The YouTuber believes that the positive developments in Venezuela could create a 'halo effect' across the Latin American hemisphere, benefiting Sea Limited, which has growing operations in Brazil. He also states that Sea Limited was already cheaply valued, suggesting that any positive news would have an outsized impact on its stock price.

“It's worth noting that I also think that C Limited is quite cheaply valued as it was. So that any positive movement would have an outsiz effect on C Limited.”

The YouTuber considers Sea Limited to be ridiculously cheap at $125 per share, citing its wide and growing moat, founder-led management, and optionality across gaming, e-commerce, and fintech. He acknowledges risks from TikTok Shop and potential stalling of FreeFire but believes continued execution will prove the stock cheap long-term.

“At the time of this filming, shares were trading for about $125 per share. And I considered that to be ridiculously cheap.”

The YouTuber considers Sea Limited a good deal, noting that its current price suggests only 5% annual revenue growth over the next decade, while analysts expect over 20% growth in the short term. He dismisses fears about TikTok Shop causing pricing wars or the gaming division's decline, believing the market is overly pessimistic.

“If you believe that this company can get 20% free cash flow margins, then revenue is only expected to grow 5% per year over the next 10 years.”

The speaker mentions having recently bought SEA Limited for his speculative portfolio, but provides no specific reasoning or analysis for the purchase.

“SEA Limited habe ich jetzt noch mal gekauft, z.B.”

The YouTuber suggests buying Sea Limited if it breaks above $100 on a daily closing basis, which would also mean it crosses its 100-day moving average. This pro-cyclical buy signal could lead to a move towards $130, potentially offering a 30% gain before encountering resistance at the 200-day moving average.

“Ich würde nämlich hier gerne ein prozyklisches Kaufsignal über ja tatsächlich 100$ sehen. hat den Hintergrund, hier seht ihr die orangene Linie, das ist die 100 Tagelinie und wenn die auf Tagesbasis überhandelt werden würde und dann auch das letzte Hoch noch rausgenommen würde, was ja hier bei den 100$ gepreist worden ist, dann ist auf der kurzfristigen Zeiteinheit zumindest mal ähm wenn dann auch hier die Kurslücke zugemacht wird, die zwischen 66$ und 106$ Dollar besteht, dann ist auf der Oberseite ziemlich viel Platz und zwar minimum mal äh bis auf die 130.”

The YouTuber acknowledges that Sea Limited is executing well, with strong revenue growth across its e-commerce, fintech, and gaming segments, and trades at a forward P/E of 20.7 despite being down 53% from its highs. However, he prefers MercadoLibre due to its stronger moat and higher growth potential, and does not feel the need to own both.

“So then the question is am I buying C Limited today and the answer is no and it's simply because I own a lot of Marcato Libre and I do think that Marcato Libre is the better business with more modes and actually more growth as well.”